NBN speed monitoring key to keeping the bastards honest

As NBN drops wholesale prices, real-world speed monitoring by Australian consumer watchdogs the ACCC and Choice magazine should ensure retailers don't drip feed us bandwidth and pocket the savings.

NBN's latest pricing changes are complicated but, for those playing along at home, the most important thing to understand is that the changes aren't about increasing your monthly home download limit. Nor are they about boosting your maximum potential download speeds.

New NBN pricing aims to ensure that your broadband doesn't slow to a trickle on Friday nights - but only if the retailers get onboard. Photo: Adam Turner

Instead the changes are about easing congestion to ensure that your home broadband connection doesn't slow to a trickle on a Friday night when everyone in your street is watching Netflix.

Go with the flow

Comparing broadband to the water flowing from your kitchen tap works well as an analogy, so let's stick with it.

NBN is building fat water pipes to our homes, but we don't buy our water directly from NBN. Instead we sign up with a water retailer – like Telstra, Optus or TPG – that uses the NBN's pipes to reach our home.

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NBN charges the retailer an access fee to reach your home, plus it charges the retailer for the amount of water that's made available in your area to share between its customers.

One problem with this model is that it encourages retailers to buy as little water as possible. To be fair, they know that every household doesn't leave every tap running full blast all day and all night. To buy enough water to cover that would cost a fortune, so instead they crunch the numbers and buy just enough water to keep most homes happy most of the time.

Of course there's always the temptation for retailers to be stingy when it comes to allocating enough water to your area in the hope that customers don't complain too much. Or that demanding customers go elsewhere, so they can just keep screwing people who don't know any better.

The stingy retailers sometimes try to keep customers happy by offering "unlimited" plans, meaning you can use as much water as you want – which is meaningless if the flow becomes a trickle when you need it most.

The blame game

The new NBN wholesale pricing is designed to make water more affordable for retailers so they're not so stingy. To ensure they don't simply pocket all the savings, NBN's new 50 and 100 Mbps wholesale plans also tie access and bandwidth charges together – forcing retailers to allocate more water per house. NBN is also dropping the price of additional water.

If retailers pass on the savings, the new pricing will make the 50 and 100 Mbps plans more attractive for your average home – also helping to ease the broadband squeeze in busy households.

Don't presume that your telco will automatically put you on a better deal, especially if you're on a long-term contract, you'll need to hassle them about it. Some of the changes won't kick in until the middle of next year.

So when you turn on the tap and not enough water comes out, who do you blame? The retailers are quick to blame the NBN pipes, which is some cases is fair because the rollout has seen more than its fair share of troubles.

Your retailer is hoping that you'll just put up with poor service because switching to another retailer won't make a difference if the problem with your broadband is the NBN pipe in the street. Yet switching to another retailer will make a huge difference if the problem is that your retailer hasn't bought enough bandwidth for you and your neighbours to share.

Time to shop around

So how can you tell when it's time to ditch your stingy NBN retailer? Under pressure from the ACCC, the retailers are starting to list likely real-world speeds alongside their plans.

For example, Telstra and Optus predict that peak-time average download speeds are only 60 per cent of your plan's full potential – so your 50 Mbps plan slows to around 30 Mbps on a Friday night.

That doesn't sound so bad, but in actually fact the bandwidth dries up completely in many homes – especially if their retailer isn't paying for enough bandwidth to share between their customers in that neighbourhood.

There's no way to know how much bandwidth your retailer is buying in your area. NBN and the government can't force them to offer more bandwidth but the watchdogs can name and shame those retailers which skimp, with the broadband speed monitoring programs from the ACCC and Choice next year helping shed some light on the issue.

They're both installing tiny boxes at thousands of homes across the country, running a speed test every hour or so – all day and all night – to see if broadband connections are living up to their promises. Spread across different suburbs, telcos and connection technologies, these results will make it much easier to tell whether a stingy retailer is one cause of your broadband woes.

How is the NBN in your neighbourhood? Have you considered ditching your retailer?